As we step into the fresh start of the new tax year, it’s a heads-up for all taxpayers out there, who are in receipt of income from trade and investments. The bell rings for the 2024 First Quarter’s Provisional Income Tax (QPD). This isn’t just your regular reminder. Think of it more as a gentle nudge or, a firm push towards ensuring you are on the right side of the law and fully understand what is at stake.

The Deadline Looms

Circle this in red on your calendars folks: Monday, 25th March 2024. That’s the day your first instalment of provisional income tax is due. We are talking about the 10% of what you reckon you will owe the taxman from your trade and investments business over the year. This isn’t just another payment; it is a cornerstone of your annual tax strategy, and the QPD has to be paid in whatever currency you are  trading.

Who Gets a Pass?

Now, it’s not a one-size-fits-all situation. Some of you might be  exempt from making this provisional tax payment. If you are expecting a year of losses or if your business gears won’t be grinding in 2024, you are off the hook. But hold on, you still have got some homework. Filing the Provisional Income Tax return (ITF12B) via the Tax and Revenue Management System (TaRMS) by the due date is your ticket to making that official.

The Clock is Ticking

With the shift to TaRMS, things are a bit different now. Gone are the days of instant payment processing we saw with the old SAP system. There’s a one-day lag now, which means dragging your feet isn’t an option, especially when it comes to payments into the ZIMRA Single Account.

The Price of Dragging Your Feet

Here’s the deal: missing deadlines or skimping on your payment is going to cost you. And if you’re playing the guessing game with your provisional tax and miss the mark by more than 10%, expect the taxman to come knocking on your door for interest. It’s all about being on the dot with your estimates within that allowed wiggle room.

Interest Rates Heads-up

Keep your eyes open for the current interest rates – we’re talking 10% per annum for those dealing in foreign currency and a whopping 200% for the outstanding Zimbabwe dollar balances. These figures are crucial for making sure your provisional tax calculations don’t end up costing you more than they should.

Financial Reporting for Compliance

As we navigate this first quarter, it’s crucial to have a handle on your business’s financial metrics: This, my friends is what you give to your accountant to do the QPD calculations for you.

• Actual Results of Expenses and Revenue for the period from 1 January 2024 to the current date.
• Actual Turnover Amounts in both ZWL and USD for the same timeframe.
• Estimated Tax Profit/Loss for the remainder of the 2024 financial year.
• Actual Split of Turnover earned in foreign currency and Zimbabwe Dollars, with estimates extending to the end of the tax year.
• Capital Expenditure Details including those proposed.

These financial insights are not merely for tax compliance but are fundamental to strategic financial management and planning.

In Summary

Staying ahead of the First Quarter Provisional Income Tax for 2024 is about more than just ticking off a box; it’s about prudent financial management. Proactively managing your deadlines, accurately estimating tax liabilities and thoroughly understanding the implications of provisional quarterly tax payments are crucial for navigating the  tax compliance landscape effectively. Timely and precise compliance is essential for maintaining not only legal conformity but also for safeguarding the financial health and integrity of your business as we forge ahead into the year.